TikTok's decision to boycott Merlin and pursue deals directly with Merlin's record labels is a worrying move that undermines the right of labels to choose how their music is licensed. While TikTok frames this shift as a way to deal with streaming fraud, it's clear that the real motive is to weaken the bargaining power of independent labels and use that leverage to suppress interest rates.
Merlin has built strong partnerships over the past 16 years with more than 40 digital services worldwide. These partners recognize the value that Merlin brings—efficiency, scale and a deep understanding of the independent music community. TikTok's move to Merlin's margin isn't about protecting against fraud, it's about undermining the ability of independent labels to achieve competitive terms, not just now but in the long term. The ultimate consequence of his refusal to negotiate with Merlin over the music that makes TikTok billions of dollars will be to hurt artists' ability to make a living from their art.
This tactic is not new. It echoes the music industry's historic struggles with partners like terrestrial radio and MTV, who profited massively from the use of recorded music while refusing to pay artists under the guise of “promotional value” or “exposure” — ostensibly for selling CDs or An artist's LP. In this predominantly digital economy, streaming is selling – and it has been widely reported that TikTok pays rights holders far less than other services for equivalent uses of music.
Independent companies choose Merlin to license their rights because of its expertise, experience and track record in reaching these types of deals. This ensures compensation at levels that allow them to compete with the big companies and protect independents from unfair exploitation. TikTok's decision to bypass Merlin and demand direct deals is an attack on the freedom of SMEs to determine their own business strategies. The fact that TikTok is giving Merlin members a few days to accept TikTok's terms or lose access to its massive platform is an unfair exercise of its market power.
This apparent divide-and-conquer strategy is, we believe, designed to keep payments low for indie artists by taking advantage of their perceived dependence on the TikTok platform. This is not about tackling fraud or improving the digital music ecosystem. In fact, by exponentially multiplying the number of licensing deals TikTok will need to secure and losing Merlin as a partner in the fight against fraudulent content, more scams are likely to emerge. Merlin simplifies licensing, making it easier for platforms to access diverse, independent music. Fragmentation of this system hurts artists and fans and will limit the range of music available on TikTok.
At its core, this issue is about respecting the rights of independent labels to determine how their music is licensed. TikTok's behavior does not reflect a problem with Merlin. it reflects TikTok's lack of respect for the value of music. Every other major platform has entered into responsible agreements with Merlin that balance the needs of the service with optimized compensation for artists. TikTok's refusal to do so sets a dangerous precedent for recording artists and their labels.
TikTok needs to stop undermining and disrespecting the independent music community. It can do this by working with record label rights management to create a fair, transparent licensing system that benefits all stakeholders in the music ecosystem. Independent labels have the right to choose their representatives to negotiate deals that truly reflect the value of their artists' creative contributions. Anything less is bad for artists and fans and undermines the very fabric of music culture.
Dr. Richard James Burgess is an accomplished musician, singer, songwriter, record producer, composer, writer, manager, marketer, and inventor who currently serves as president and CEO of the American Association of Independent Music (A2IM).
from our partners at https://www.billboard.com/pro/why-tiktok-decision-boycott-merlin-hurts-independent-music-culture-column/